Daily Tax Update - October 4, 2012: Obama, Romney Hold First Presidential Debate

OBAMA, ROMNEY HOLD FIRST PRESIDENTIAL DEBATE:  Last night’s Presidential debate between President Obama and former Massachusetts governor Romney focused on domestic issues including taxes, the economy, and health care.

  • In his opening remarks, President Obama said, "I think it's important for us to develop new sources of energy here in America, that we change our tax code to make sure that we're helping small businesses and companies that are investing here in the United States, that we take some of the money that we're saving as we wind down two wars to rebuild America and that we reduce our deficit in a balanced way that allows us to make these critical investments. Now, it ultimately is going to be up to the voters, to you, which path we should take. Are we going to double down on the top-down economic policies that helped to get us into this mess, or do we embrace a new economic patriotism that says, America does best when the middle class does best? And I'm looking forward to having that debate."
  • In his opening statement, Gov. Romney said, "My plan has five basic parts. One, get us energy independent, North American energy independent. That creates about four million jobs. Number two, open up more trade, particularly in Latin America; crack down on China if and when they cheat. Number three, make sure our people have the skills they need to succeed and the best schools in the world. We're far away from that now. Number four, get us to a balanced budget. Number five, champion small business. It's small business that creates the jobs in America. And over the last four years small-business people have decided that America may not be the place to open a new business, because new business startups are down to a 30-year low. I know what it takes to get small business growing again, to hire people. Now, I'm concerned that the path that we're on has just been unsuccessful. The president has a view very similar to the view he had when he ran four years ago, that a bigger government, spending more, taxing more, regulating more — if you will, trickle-down government would work. That's not the right answer for America. I'll restore the vitality that gets America working again."
  • President Obama said that Romney is pushing a $5 trillion tax cut plan that would skew toward the wealthy. Obama said that to offset that plan, Romney would have to either add to the deficit or raise the burden on the middle class. Obama said, "It's math, it's arithmetic."  Romney responded, "I don't have a $5 trillion tax cut and pledged that it would be deficit-neutral and not hurt the middle class."  Romney said, "There'll be no tax cut that adds to the deficit. I want to underline that -- no tax cut that adds to the deficit. . . I will not under any circumstance raise taxes on middle-income families."
  • On the issue of corporate taxes, Obama said, "When it comes to corporate taxes, Governor Romney has said he wants to, in a revenue-neutral way, close loopholes, deductions — he hasn't identified which ones they are — but thereby bring down the corporate rate. Well, I want to do the same thing, but I've actually identified how we can do that. And part of the way to do it is to not give tax breaks to companies that are shipping jobs overseas. Right now you can actually take a deduction for moving a plant overseas. I think most Americans would say that doesn't make sense. And all that raises revenue."
  • Romney countered, "[Y]ou said you get a deduction for getting a plant overseas. Look, I've been in business for 25 years. I have no idea what you're talking about. I maybe need to get a new accountant. But the — the idea that you get a break for shipping jobs overseas is simply not the case." 
  • Obama said that Romney has offered few details on the changes to exemptions, credits, and deductions he would make to offset tax rate reductions. Obama said, "The problem is that he's been asked over 100 times how you would close those deductions and loopholes, and he hasn't been able to identify them."
  • The transcript of the debate can be accessed here.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE: 
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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